andrew ross sorkin is off. he's still on vacation. that march employment report now just about 150 minutes away for those of you who are counting. if you want to set your watch, we have a countdown clock in the bottom right-hand of your screen. polled forecasts say the economy probably added about 200,000 jobs last month. that would be below the february gain of 236,000 payrolls. the unemployment rate is expected to hold at 7.7%. average hourly earnings are seen rising by 0.2%. the concern is that that number could come in weaker. we've gotten a lot of lousy numbers recently, including the adp report and the ism, the employment section of that was weaker that week, as well. if you look ahead, the market is not all that optimistic, at least not at this early hour. right now, dow futures are down by 48 points below fair value. the s&p is off by 4 1/2. the market has been fluctuating. i think the last 12 sessions, the market goes up, the market goes down. right now, it looks like it's down, but we'll see. anything can happen when 8:30

hits. we have a great lineup on this friday. in just a few minutes, we'll be talking with templeton's mark mobius. maybe he's run into andrew. >> i was thinking the same thing, maybe in vietnam. >> but first, before we get to all of that, joe has the morning's top corporate stories. >> i do. and a lot of ways to interpret that alternating session. >> to me, it's like every time the market is a pullback, everybody rushes in thinking this is a pullback i can jump in on. >> yesterday i saw rally's last gasp, question mark. and we've been quick to do that, particularly on shows where an afternoon is long-term. an hour is medium term and two minutes is short-term. >> right.

>> for me, if i saw a market go up 35% in 18 months, and, you know, since the beginning of the year, whatever it is, 12%, 13%, i would think it would be normal maybe to consolidate a little, not give the people that aren't in a big time chance to get in, sort of -- >> unless it's been happening. >> that's what i think is happening. i don't think it shows that all of a sudden it's run out of gas. >> although the economic numbers have been loud lousier. >> but you're in a position now where this week all we've been thinking about is whether they start -- they've got to sink in. first they had us thinking things are good enough to start tempering our purchases. we had a couple of fed guys say, i don't know, maybe by summer things are going so well, maybe we start pulling back. and then all of a sudden, the market comes in and shows us that adp report and the claims number. maybe they're not going to -- so what do you do? if you're a trader, are you happy?

the employment faction of the ism was really lousy. >> maybe it's sequestration. but if it means they don't pull back in the summer, then you buy. >> right. >> so it really isn't -- the fed has a point where it's kind of -- the market is going to go. you saw japan. money, when you do this, markets go up. when you flood the market with -- >> i have to say it's fun to watch and try and figure out what's really happening. >> but i think we are at a point in and out where good news is good news and bad news is the fed because it was almost like that first tepper call. i was going to say, david tepper. >> in corporate news, there was a shake up. this guy lane at hewlett packard, he's resigned. he came under fire from shareholders for his role in the acquisition of autonomy. that disaster. he will remain on the board, though. a director and activist investor ralph wittmer is going to serve as interim chairman until lane's replacement is found. two other board members are

going to leave. g. kennedy thompson. he's from wachovia. g. kennedy thompson. that's the guy from wachovia who just got slammed in -- i recognize his face. and john hammergren, who is a health care executive. he's done great. i mean, he has managed that company beautifully, but he's taking a little flack because he has made so much money. there have been years where he was one of the highest paid ceos in the country a couple of times. it's a big company and he has shareholders have flourished under his reign. he's done a great job. but he was very well paid. good guy, though. and the three men leaving the hp board won re-election at the shareholder meeting last month, but only by narrow margins. international property firms iss and glass lewis had recommended investors vote against the director at hp.

we're going to talk more about this story in the next half hour with management expert jeff sonnenfeld who knows a lot about hp. he's almost made a living talking about hp. >> he knows about a lot of companies. >> he does. but whenever we want to talk about hp, we have him on. and boeing may carry out a test flight of its 787 dreamliner today. it's a key step towards returning the aircraft to flight. once they finish testing, the faa will review the data and decide whether to certify the battery fix in return the plane to service. korea seemed like a big deal yesterday, north korea. >> i wonder how big of a deal -- >> i read it today and they moved a missile that may or may want work into the east part of the -- the eastern part of the country. >> does that tough work? >> but they're not going to do it until april 15th because it's

the anniversary of kim jong an's birthday. it's not an explosion is approaching and we're trying to launch a nuclear attack. oh, here it is. i wasn't criticizing, i was just saying that shows you how quickly the market's reaction yesterday was legitimate because all the bluster probably wasn't going to be backed up. he's like his father. in global news, south korea's top finance officials are warning north korea could have a prolonged impact on markets

there. they held an emergency meeting and promised to take swift and strong action should the markets lose stability. north korea threatened to strike the u.s., threatened the military bases, it has warned of war with south korea at any moment. >> you think thing that this guy knows, he's young, he's 30, he likes dennis rodman, if he likes something, he's gone. >> i hope he knows that. >> a lot of the stuff he does is obviously the perception -- >> the idea of nuclear detaunt is that. >> and he wants to be a nuclear power, he wants respect. but he wants to stay in power. i think that he's even planning -- no one really knows who is pulling some of these strings and they're not stupid, either. time for the global markets

report. if i had to give a global markets report, i would be intimidated, but we have someone that haas no problem doing that. bring it on. it's my favorite time of the day. let me tell you exactly what's been happening, joe. let me start here with europe. aside from some peripheral green on the markets, it's been a pretty strong sell-off. we're seeing big moves down better than 1%. almost 1% for the uk market, as well. despite a bit of a rally, it's been a pretty weak session and without any major catalyst, either. which is the interesting thing about this. turning our attention to the bond space, it's been a different story. and, in fact, what's happening on the yields with the first, let me explain what's happening in the yields with the second, too. germany and japan, 1.25% and 0.25% respectively. there was movement back and forth in jgbs today that got

people focused on just how weak the market might be. but at this point, yields settling at about 057%. the point being, when that's all you can get from japan and from germany, the yields on spain and italy at about 4.5% and 4.8% respectively don't like that bad. we see the dollar/yen. this morning, the yen strengthening a bit. it's now just over on 96. we've had george soro is s among others, bill gross, warning about a potential breakdown in the yen. but for 2d, it is taking a pause after some of the weakness that we've seen. the euro/dollar is barely negative. 1.2934.

equity markets are pretty weak going into the day. we've had such a string of attention on japan and europe yesterday. now it's america's turn. >> you don't know there's any eye on north korea? you think every single eye is on our jobs reports? >> okay. i lied. there's a lot of attention on korea. >> i see -- >> what's that? >> there's a few eyes on that. i said in the beginning that the stakes couldn't be higher nor the jobs report. >> and he took it back. >> i see to take that back. >> this one perhaps more important than the last one or two. but for the most part, a lot of people saying unless it's a zero

or a 500,000, fights not going to be a game changer. >> i just want to keep it real. you know what i mean? >> i've tried to emulate that. >> i'll never make it on network. >> you say whatever you're supposed to be -- >> local news i'll never make. never make it on local news. never make it to network news. >> no. you speak the truth. >> you can't be in advertising. >> right. but that is one of your greatest skills and something i've tried to emulate. >> that's good. thank you. >> i mean that 100%. >> really? >> i do. >> you get -- >> when you're a viewer, that is the most -- >> but you also know with me you're going to -- you know. stop. stop. >> we better move on.

>> why don't we stick with the global markets. our next guest loose for emerging markets. mark mobius is the executive chairman of templeton emerging markets group. what do you think of north korea and how big of a threat does that pose for some of these asian markets? >> it's more of the same. we've been to that place before, as you know. and the last time around, markets, you know, didn't really react to any great extent. i think the element of surprise is not there yet. so if anything is going to happen, it will probably happen after the story dies. right now, i don't think it's going to impact the markets yet. there's no question with the way the u.s. is revving up for south korea, we've got to keep an eye on it. >> yeah. i think that's what has concerned most investors was the u.s. reaction, not the saber

rattling that's coming out of north korea. but the idea that maybe somebody in the u.s. military knew something we didn't, just based on the response. i guess that is the one thing that differentiates this. >> exactly. moving missels to guam, for example, quite significant and a number of other measures. so it bears watching. >> what about what japan is doing? the bank of japan yesterday going ahead and going through with these moves that we were expecting, maybe even taking some more significant moves than they had been hinting along the way. does it work this time for japan? and what does that mean for some of the other markets around them? >> it's wonderful. and it's working sxp it's going to work because they are determined to get this moving at least to 3% inflation. as a result of that, the amount of money they'll be printing will be very good for markets.

technically markets in asia. we're quite happy because we're equity investors. don't forget, the japanese are major direct investors, not only in equities in asia, but also directly in factories in tie lntd, for example, or retail outlets in indonesia and so forth. it's going to be significant. >> we saw stocks moving higher on that move yesterday. are there other stocks in japan that you'd be telling people to invest in? are there other markets broadly, you would say? >> i think any of those export companies that were lagging are going to be a good target. they're going to be doing quite well. there's a lot of technology in japan that has not been noticed by investors around the world.

things look that have great meaning to investors around the world. >> we had a guest who said part of japan's problems was that they had not been reinvesting enough. they have not done what the bank of japan is trying to get them to do, which is take more money and get money off the balance sheet. this guest was saying, look, they've had a big problem with that. they have not reinvested. their technology has fallen behind. it sounds like you are strongly countering that argument. i think there's really things that are happening, particularly when it comes to innovation. >> exactly. as they are able to export, as they become more competitive, their profit majors would increase and they are using that moem money to reinvest.

but that will change, i believe. >> what type of gains are you looking for from these stocks in japan? >> i think you're going to see 20%, 30% increases. don't forget, you've already seen big increases. can't give a time frame. but 20%, 30% increase is not what our markets in asia do you think will be the biggest beneficiaries? >> i think the southeast asian nations. of course, you'd seen thailand outperform everybody else. but countries like vietnam will do very well. the lampur market is beginning to move. indonesia in particular. and now myanmar is beginning to open up and that will be quite significant. >> what do you think europe with the troubles that they've been facing, the european central bank has not gone all in in

terms of trying to loosen things up there. >> it's unbelievable what they did in cyprus. i cannot believe that they would do that to small savers and the even large savers. it's very damaging to the confidence in europe. nevertheless, as i've been saying for the last two years, europe and the euro will survive. they'll get over this after many policy mistakes. >> one of the good things about what is happening in europe is that the east european nations can no longer depend on handouts. they're going to have to pull themselves up by the boot straps and that's a good message for

them. >> mark, one of the things that occurred to me yesterday, and i'm late, obviously, to the party is we've got a stated intention in japan to engender some intlagz. i understand that makes sense given the magnitude of what they're going to buy, that bond yields go down. but it seems to be a commentary on the likelihood of their ability to get inflation to 2%, that they've still got people willing to give a half a percent for two years. there's no way they're going to be successful because no one would buy those bonds. and then i -- that seemed like a profound thought until i thought about what we're doing here and the amount of money that we're putting into the system here and people are accepting 1.8%, so we're not going to be -- people don't think we're going to be successful, either, in getting

above 2% inflation. so i don't know, it just seems like a less than -- am i just late or what is the story? >> no. i think from what i've seen people are now beginning to wake up to the reality that they've got to get into equities. they cannot continue to hold fixed income instruments that are paying 0.2, 0.5, even 11 one. dividend yields are now at 3% in many markets around the world. so it takes time. people don't move very fast. but once they move, then you're going to see tremendous bull markets. but this is just the beginning as far as i'm concerned. >> when you started talking, i put my cough switch on. as far as mobius goes, i can't hype you because it wouldn't be

hype, i told becky. >> but you know -- >> go ahead. >> i'm so busy managing other people's money, i don't have time to look at my port follow crow. but if you look at my portfolio, ooip i've got something like one-third in cash. what am i doing? why is am i doing that? it's just inertia. that is going to change, i think. >> if there's anyone i'd listen to, you're in the top three, probably. and ieng you'll be right about equities have been out of favor torso long, we could have a period of outperformance that could last a decade, maybe, this time. hopefully. >> exactly. >> mark, when you say this inertia is going to change, you mean in your own portfolio, too? >> oh, definitely. i'm doing that, in fact, today.

i called the bank and said let's do more in equities because it's crazy for me to be sitting on cash. don't misunderstand me. i'm not recommending everybody do what i do. but from reality, i think people will begin to wake up to this situation. >> mark, thank you very much. we hope to talk to you again soon. >> thank you. >> not just because he looks so mysterious, either. >> although that helps. >> it does help. the accent. and he's never in the united states. he's always scouring the global. coming up, we will have a countdown to the globs report which does have some rather large implications today. we'll talk expectation wes a top economist. first, legendary film critic roger ebert has died following a long battle with cancer. ebert became a household names

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welcome back. as you know, the march jobs

report is due out in about two hours. our next guest is flagging a possible down side surprise for the report. thanks for coming in, allen. iconic. before the -- should i go on? >> don't. stop. don't. stop. don't stop, don't stop. wednesday, adp was a little weak. and yesterday another claims number that was disappointed. did that go into your thinking? >> a little bit. we had a lot of upside numbers last month. motion pictures and sound was big. >> we're worried about swooning. >> no. not going to swoon. look what's going on in japan. >> what about -- >> no, the sequester is $85 billion. cuts and appropriations, spending cuts are $45 billion

this year. it's a $16 trillion economy with 40 to 45. >> it's not going to help, though, and those notices are going out in april, most the last time in march. >> what does hurt is the increase in social security taxes. we had $200 billion of fiscal restraint these year. so it takes something out of growth. but the private sector, housing, consumers should do better. so the high frequency indicators should get softer and they are getting softer. so we grow more slowly. and then the rest of all this stuff that's going on and the lag of fixes easy money everywhere, including in japan later this year, should list the global and u.s. economy. total for this year? >> we're at 2.75%.

and probably stronger than that. >> what do we get in terms of unemployment? what kind of -- >> well, i think we're going to be in the low 7. that means the fed will now be seen as paper. many of the fed are talking about paper. so you add less to the balance sheet. they could add less to the balance sheet because housing is in good shape, even fannie mae is in good shape and next year add less treasuries. >> the fed will start tapering? >> it will be in the second half. >> okay. for some reason, this is just occurring to me because i guess for some reason, 1el 85 here for ten years is awful. i don't know why anyone would do it based on the possibility of inflation at sh point. but someone would give someone money for ten years at 0.4% when their stated intention is to try to bring inflation back in japan to 2%. so you would be crazy to

september 0.4%, but yet people are doing it. why? what does it mean? >> well, look, there's no return. the japanese are very cautious. >> it seems like it's going to end badly. >> no. i think it's going to work. >> because we own a lot of bonds in this country, too. and if rates do finally go up and, you know, we own these ourselves, if rates go do up, they're going to have a huge -- >> no. the central bank of japan is stuffing the banks with more money. the banks of japan are going to buy securities everywhere. >> the currencies -- >> no, currencies in the asian countries go up. even in italy, all the time yields are coming down. the japanese private sector banks are going to buy money cheaply and they're going to reinvest it.

that will get reinvested all over the world. that's a downward force in interest rates all around the world. >> where will the yen be? >> at least well over 100. that's where i've been for quite a while. >> doesn't the people's standard of living -- >> no, because ultimately the japanese economy is better. from the pumping in of funds, a better japanese stock market which will lead them to i h lend more money. it then helps all of the world. so when chairman bernanke, i think i have that right, when chairman bernanke says is good for the world and janet yellen says is good for the world. ultimately, if japan grows at 3%, it's good for the world. >> maybe someone will get married and have a kid in in japan one of these days. that would be great. >> china is stepping on that

door. when we come back, we will talk to jeff sonnenfeld about what ray lane's departure from hp means for the future of the company. buy a dog. mow the lawn. get a sign. hang curtains. plant something thorny. buy another lock. and, of course, talk to farmers. hi. hi! ♪ we are farmers bum - pa - dum, bum - bum - bum - bum ♪ transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business.

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welcome back, everybody. offer top story this morning, the jobs report. michael searry is joining us now. what are you expecting with this report? the numbers leading up to it have been lousy. would it surprise you to see something well below 11 1 200,? >> what has concerned me is in the past years, substantial rallies are not happening. the commodities are melting down and the stock markets are still at the high. i wonder if that's a precursor

to weakness in the stock market in the last couple of weeks. it's been on such a tear. i am concerned about looking at grain prices, metal prices, oil prices and many of the other commodities all hitting new lows. i think that eventually that could catch up to the s&p. >> so you don't think this is a buying opportunity for the commodities as much as a chance to short what's happening in the stock market? >> yeah. i'm still negative on the commodities. last year we had a big sell-off in april and may. it looks like the same pattern. i think there's further weakness to go. look at the treasuries in the u.s. dollar. they basically continue. one thing about the u.s. dollar, if you look at the five-year note, we're almost right at all-time yields. listening to joe, i agree. if you're a long-term investor, you have to be short the five year and the ten year. eventually, it's going be unwound and it's going to be a better situation. it's a matter of when. >> michael, thank you and va great weekend.

>> thank you. other news we've been talking about this morning, ray lane is out from hewlett packard. joining us now is jeffrey sonnenfeld. jeff, we've been trying to figure out what this means. maybe not a huge surprise, given what happened at the shareholder meeting that there would be some changes that came to the board. >> it's not a huge surprise. what's a surprise for some is that this is something the hewlett packard board is doing without any act morimoniny. while i think this is a tragedy that shouldn't have happened, and i think we're making a martyr out of a really good guy is that, in fact, it is a great sign of shareholder respons responsesivene responsesiveness. i think the shareholders are making a mistake, but they're the owners, they're the boss. with just barely a 60% positive vote, that was a sign that there was a loss of confidence and somebody had to take the bullet, take the hit for it. but it's a shame. we've gone into a culture of a

vilification of business judgment mistakes. >> although autonomy was a pretty big mistake, and it's hard to figure out exactly what happened. obviously, the ceo who was heading things up was gone at this point. what did happen with autonomy? >> you know, that's the good question, becky, that a few people ask. ray lane, the chairman, was taking a huge hit here. that ceo was only on the job, literally, one year, september 10 to september 11, 2011. he pushed three deals. ray lane pushed back on it. ironically, the director who is also leaving the board is merely stepping down as chairman, one of the two directors, ray will stay on the board, but john hammergren was the chairman of the finance committee, by all reports was especially opposed to this autonomy deal. but they had two audit firms review it. this was supposed to get them into the big data space.

we saw microsoft with a comparable write-down. there's no witch-hunt there. we've seen even the great googles had mistakes. as jamie dimon has complained, every foot fall, we start to see it as if there's some federal crime. people are entitled to make business mistakes. this was an honest business mistake and this chairman didn't know anything or do anything differently than the rest of the board knew and did with the best advice they had available. but good for them for somebody taking accountability. but, you know, in the early '80s, i think it was 1983, i was trying to get david back ard to cooperate with me on some research and he wouldn't. he just said, jeff, the only advice i have for you is tell your ceos to take risks, ask big questions and don't be afraid to make mistakes. he said if they're not making mistakes, then they're not thinking big and they're not reaching enough. it's good for businesses to make mistakes. if they can absorb the mistakes,

this company at issue, a top performer on the dow, a little bit of a down this week. and their shareholders have been hurt here. >> it's been a tumultuous ride for several years. >> it's a different board, a different leadership. >> but it has been probably a long haul for hp, if you're a long-term shareholders. >> it really has. in their 75 years, for the first 60 years, they basically had the founders and two great ceos. that's it for six years. then we've had six ceos. the last ten years. >> as you mentioned, this is something the board decide to do itself. ray lane is staying on as director. and you give him kudos for that, correct? >> i give him kudos for that and for recognizing that ray lane is

a software technology genius, former top star at oracle and a great venture capitalist. he has great knowledge they should retain on the board. and good for them and good for ralph wentworth stepping in. ray lane is the guy that drove home depot's big change. ralph wentworth is not one of these short-term investors. he skd asks good questions. he's always been a good board member. he's been on 11 different boards. he's only on one board right now, this board. he has deep relationships in the pension community. he does a lot of good for them, even if it's short-term there. they're looking perhaps for a more permanent chairman. here you have a chairman that can reflect. meg whitman can focus on running

the company. >> jeff, thank you. it's great talking to you. >> thanks. coming up, forget christmas. this is the most wonderful time of the year for home improvement. and gardening. boy. we're going to ask a top home depot executive if having a green thumb will be profitable for the company. that's next. ♪ [ laughter ]

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welcome back. springtime. that means peak selling season for the nation's largest retailer. craig renier is in charge of merchandising at home depot. it's start right now?

we have to get some warm weather, craig, number one. >> yeah. good morning. we're kicking off our spring black friday. >> it's a lot of yard work, obviously. and i need a lot of yard work. i need a lot of seeds. there's no grass anywhere. but i guess when it gets warmer, that's when most of the construction, if you're going to do home improvement, that's when it happens, korea? >> correct. spring is obviously our biggest selling season overall. and really the whole store comes alive in the spring. >> you know, i go to home depot. it's hard for -- i know what you think. you think i look like a really handy guy. that's the impression most people get. >> unless they're careful viewers. >> but, in fact, i'm really not that handy. craig, this is one thing i'm going to tell you. i keep hearing about how great frank is from langone and

others. but i went in the score like a week ago. when i walked in, all i was looking for was light poles. but when i walked in, someone immediately asked me what i needed, really nice, and told me where to go. then when i got to the row where the light bulbs were, they were a specific time, somewhere came over to me there. it's not like walking into a sears where there was an echo. that has been a conscious effort to do that. really friendly people that make it their business. if they see someone, they ask you, what can i do, right sthp. >> yes, it is. we're very focused on customer service. it's a key element of our business. and by the way, joe, i hope you bought some of the l.e.d. bulbs that we have in the aisle there when you're looking for those light bulbs. >> they were a specific kind. you know, we've got probably 20 different -- and i stock up on them. 20 different kinds of light bulbs in our house. but, you know, i will say i asked the people to come out and help me change them and they were not willing to actually

leave the springfield union location. i guess there's nothing you can do about that at this point, right? >> no, probably not. >> wa kind of numbers are we talking about in terms of increase from other typical fridays or weeks? i mean, wooudz a bump this week seasonally? >> certainly we will as customers respond to our black friday effort here. it's obvious that spring hasn't sprung in all the markets yesterday, but where it has, we're very happy with the results. and we're ready in the markets that it hasn't. so, yeah, we will definitely see, you know, customers respond to the outstanding values that we've put in the marketplace. >> in general, we always think about home depot as, you know, good times or when people are just -- when construction is hot, home depot is good and even in bad times, i guess people remodel instead of buying. how do you gauge the consumer

right now and the health of the consumer anecdotally from what you see? they've come a long way in the last three or four years? >> certainly we've had a very nice run for the past few years. our core business, our maintenance and repair business has been really a strong element of our business over the past several years. and recently, say in the last 12 months or so, we've really seen what we call our simple decor business gain some real strength. and so the customers beginning to take on projects again. >> all right. craig, we appreciate your time. good luck. keep it up. >> thank you. >> he didn't laugh when i said that some people, you know, are surprised to learn i'm really not that handy. >> anybody who has been watching this show for a while because you talk about it. >> remember that guy who -- >> the guy who you wanted to kick out. >> the pretty boy that came in here. not only did he look like that,

but he's also handy. and i look like this but i'm not handy. but i don't hype things, at least. i've got that going for me. >> that's right. when we come back, the man who leads the royal dutch shell, we'll get his thoughts on everything from gasoline prices to whether the united states should start exporting crude oil approximately. coming up t top of the hour, few people know the world better than tom freedman. so it is great to have him in studio with us. he is in the quack green room right now. he's going to join us to talk about north korea, the middle east and much more. my mantra?

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welcome back, effect. crude oil prices down for a third day as traders assess the latest round economic supplies and as supplies increase. thank you very much for being with us today. we have been trying to get our heads around just what the supply of money, this increasing supply of money that's out there pause of central banks around the globe. what has that meant for oil prices? has that been a huge factor as far as you're concerned? >> no, i don't think it's a huge factor, no. what is the demand outlook look like and what is the current supply picture in terms of production. i think those are the main drivers. >> how have full supplies been impacted? when you look around the globe

what's really the state of where the oil business stands right now? >> well, i think we have seen the opportunities for supply coming forward fairly well. so tremendous changes here in north america. and we're continuing to find more options in other parts of the world. and we're also now, as you have seen, starting to step into areas like the arctic. i think the supply picture over time is pretty good. what we have to remember is demand picture should be growing quite considerably. >> where are your biggest investments in north america right now? >> well, they're across the board. so they're in this wave of new natural gas that we found. still very much in the deep water of the gulf of mexico. and finally our program in alaska. >> of those programs, where do you have your highest hopes set?

where do you think some of the biggest numbers, some of the biggest surprises come? >> i think when you look at what's the most transformational in the business right now it is really natural gas. we have confirmed there are incredible supplies across north america. on the order of 100 years of supply based on current use apbapbge. wupb of the things we started investing heavily in is taking natural gas into transportation. the way we ship gas between countries around the world. and now doing it on a small scale. now it can be done with rail. >> do you think the united states can be energy dependent in the next decade? >> energy secure, certainly. energy independent, probably as independent as we want to be. one thing we ought to keep in mind from a free trade

standpoint there is a max mally efficient way, refining capacity and that type of thing. so i think there are still very smart decisions to be made where we want the products to go. >> i take it you're in favor of exporting as well? >> well, i think if you look at the hundreds of billions, maybe even trillion dollars invested in refining around the world, it doesn't make sense to duplicate that. if you have tremendous amount of light oil in north america and there's a better way to rebold, some of that will make sense at least for a period of time. >> at least for a period of time. so this is something you want to take slowly and gradually before we start shaking up the whole infrastructure? >> it will be the mechanics of the market. those investments will be made over time. the energy system is so massive that nothing changes really

rapidly. we're talking many years of investment. >> marvin, i know you have a shell eco marathon thrown out to high school and college students to challenge them with new ways of energy. is it true students found a way to drive to paris to moscow on a single liter of fuel. >> it's a good metric. we're getting ready to have this event here in houston. five different countries participating. about 150 teams. students design these cars to go as far as they can on a gallon of gas. last year's winner went 2100 miles on a gallon of fuel. it's pretty impressive what they are able to do. >> i would like to see the mechanics of that. thank you very much. it's been a pleasure talking to you today >> two squawk newsmakers.

we will be called to session by eric cantor. first, let's welcome foreign affairs columnist thomas freed am. so much going on in the world he had to add 60 pages to his book. [ male announcer ] ah... retirement. sit back, relax, pull out the paper and what? another article that says investors could lose tens of thousands of dollars in hidden fees on their 401(k)s?! seriously? seriously. you don't believe it? search it. "401(k) hidden fees." then go to e-trade and roll over your old 401(k)s

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jobs friday has arrived. what you need to know ahead of the number. plus, a closer look at the geo-political risks facing global markets. a special interview with thomas friedman. and leadership comes to "squawk box". we talk jobs. the president, budget and north korea with house majority leader eric cantor as the second hour of "squawk box" begins right now.

good morning, everybody. and welcome to "squawk box" on cnbc. i'm becky wick along with joe kernen. the futures have gotten worse the last hour. they are down 74 points. s&p down 7.5. this comes after yesterday where the dow was up about 55 points. the day before that it was down by 100 points. a lot of swinging back and forth as people try to wade through some of these economic numbers and get a accepts of what's happening. more coming up at 8:30. the widely anticipated report. economists looking for 200,000 now jobs. unemployment is expected to remain 7.7%. steve liesman will be here with more on what you can expect. samsung reporting better

than expected jump. electronics maker said it earned $7.7 billion during the quarter thanks to rising smartphone sales. we should point out that these are preliminary figures. final numbers will be out in a few weeks, and that is a little weird. apple is close to signing a music streaming deal. warner music and universal music. they still need to get sony and other publishers on board before it can go ahead. it would be available on mobile devices. >> friedman is here. >> i know. read fast. >> see, i love you too, steve. let's get more on what we had from the march jobs report. you better give us something we can expect, steve. can you tell us? what should we expect? >> i'm optimistic. the thing i'm mostly going to do is try to explain how the fed is

going to process this. >> okay. >> first look at where we have been. 236. the here is that we come below 150. forecast remains 200. we come back down from that level. take a look now at the forecast, 200,000. 7.7 unemployment rate. i'm looking for a little bit longer than the street is is because i think they have misplaced the weakness has been mostly april. manufacturing employment stronger. services weaker. but still above 50. claims were stronger in the week of the survey. the workweek going back up. weather. maybe giveback from the strength. towards the weaker side. big week of fed talk.

bring that unemployment rate down target to 5.5 to 6.5%. bill dudley saying greater cost to risk and moving to a tighter policy. charlie evans saying 200,000 a month is what he's been looking like for six months. and earlier this week saying he's looking for good healthy peaks and job creation. let's go to our cen tri sts here. full steam head now. dennis lockhart, maybe by the end of 2013, using the word curtail, looking for a few more months of solid data. sandra, we could see slowing of asset purchases. john williams, bit of a shocker this week. he said it could start june 2013.

now, let's go to the hawks here. jeff lacquer, more assets the fed bias the more risky. current policy is too accommodating. so to my mind what we're log for for the fed is act is 200,000 this month and keep doing 200. that's where the center of the board is in my opinion for when they might reduce quantitative easing. >> we have a lot more to talk about today. we'll see you back here. >> liesman, the initial reports are off inaccurate and don't say anything useful, hence, all the emphasis on the fed paying attention to what they say to make their determinations or what to do. >> but they have been revised up ream. >> and ed, as you know, was a

bush guy but not overtly partisan. >> ed is a very well respected economist. does research by both sides, both the liberal and the conservative. ed has done stuff straight down the middle. >> he loves those jolts. >> see you back here in just a little bit. also, though, we have been talking about some of the global news headlines. south korea's top finance headlines worry that tensions could have a prolonged impact there. they promise to take swift and strong action should the markets lose stability. it has warned of war with south korea at any moment. our special guest, three-time pulitzer prize winning author tom friedman. "beirut in jerusalem."

grave to have you here. we have been trying to figure out what to make of north korea. we have news of saber rattling. but now you have the united states responding to some of these things. >> let me pick up on that intro you made. i think if you look globally we say a crisis is a terrible thing to waste. >> right. >> time-out is a terrible thing to waste too. if you think about it, between 2008 and 2013, we have had a global time-out from geo politics. there has not been a single globe rattling geo-political event that then fed into the markets and really dampened an already deep recovery. for five years we have all been able to focus inward on this economic recovery. there's been nothing really big. what scares me about this moment is two things. one, i don't think we have done all things we need to make ourselves more resilient.

you have a whole bunch of people with their toes on the lines. you have north korea threatening. you have egypt possibly approaching state collapse. syria, one toe away from state collapse. you have -- well, across the middle east all of these dangers. >> iran too. >> excuse me, iran obviously. so what really worries me is our luck. we have been really lucky the last five years. and geo politically speaking. and i hope our luck doesn't run out and say, boy, we really wasted this time-out. the party that could resolve this very quickly is china. all the chinese need to do, they are the main supplier of food and fuel to north korea. and they keep the borders sealed. so they in effect are part of the reinforcing, keeping the north korean people in. if china were to open the

border, it would have the same effect to hungary had on the eve of the fall of the berlin wall. >> it seems like they may be losing a little bit of patience. i think there was a request for a special envoy they turned down. >> yeah. >> it's tricky to read the tea leaves with the new chinese leadership. >> they say -- well, chinese we know for this half century. they love korea so much they want there to be two of them. that has always been their basic strategy. they don't want a united korea. one of the things we could be saying to them is we will make sure if you let this go forward it will not be nuclear.

chinese have been singularly unheavily. and i think sooner or later they have to step up and be stakeholders in a system benefiting them. they benefited from this time-out too. they have been able to look inward and deal with all their economic problems. putin in russia. born on third base, thought he hit a triple. sitting on all of this oil and gas. >> you need somebody to start your car for you. >> all of these guys have been irresponsible. >> i couldn't help when you were talking, wonder whether that was sort of an implicit criticism, the reign of hillary clinton as secretary of state. we didn't make any progress. we had a time-out. >> the time you're referring to is domestic. a lack of getting our own economic house in order.

>> had a chance since there were no global holt spots that we had a chance to do something. so you thought we have made progress hopefully on foreign policy. >> i happen to believe in written. i think being secretary of state right now, joe, is the worst job in the world. >> the perfect island. >> here's your job. don't take the bait. your secretary said this is how you start your day. call putin. he's sitting on this dome of oil and gas. you can call the chinese. we owe them a gazillion dollars. those are the people who picked up the phone. think henry kiss inninger 1973-74. when did he have to deal with for this incredible diplomacy?

one egyptian pharaoh and such a majority no one had ever heard. flash forward to today, you're hillary clinton. you have to deal with the muslim brotherhood deposit. >> they're like individuals. >> syria, there is no deposit. and you have is such a wide coalition they basically have to pull half the phone book to make a decision. >> we don't talk much about egypt but that is getting really critical. >> very, very dangerous. >> they are running out of food. foreign reserves are rock bottom. muslim brotherhood every key juncture they had a choice. each time they grab more power. what's the net result of that? the imf shows up. >> could the imf be giving them

more food. >> it's a very tricky situation. >> you have to cut back these subsidies. they don't have the political alliance at home. so they behaved in a short-sighted way. it would be a tragedy for the camp david peace treaty. it's a real dilemma. >> but this week when you heard we're going to detonate a nuclear device and hit the west coast, was there -- do they have the capability of detonating or would they ever detonate a nuclear device in their region? >> if you look at their history, joe, what we have seen is they have come up to the red line. it would be suicide, the end of the whole regime. at the same time he's a young untested kid. it is a crazy regime. but at the end of the day you have to believe that they will

pull back. you know, the problem with them, they're trying to maximize three thingsment they want to be politically isolated, economically integrated and strategically invulnerable. they want to be politically isolated. they don't want their people on cell phones and ipads. and this nuke was insurance against regime change. they're always trying to juggle that. and you do feel the chinese are getting fed up with with them? >> are they. the chinese benefit from the titanium. >> but that's like selling tennis shoes to walmart. ping is the first chinese leader who will have to do more reform

for the first time in history in a two-way conversation with the caye niece people. 400 million people on twitter. he's the first to make massive i think political reform in a two-way conversation. one-way conversation is over. >> wow. 400 million of them? >> yeah. it's amazing. >> tom, we'll continue this conversation. thank you. he has agreed to stick around with us. >> you like basketball. can you go over there? >> play with them. >> not with them. >> he is an nba freak. i think it's the cheerleaders he likes. >> wow. that makes him weird. can you imagine? comments, questions about anything you see here on "squawk". e-mail us or follow us on twitter. @squawkcnbc. more with eric cantor after the break. does he have a "squawk box" book award yet? >> i do.

on the wall. >> in the next half hour, majority leader eric cantor will join us to talk jobs, the economy and hopefully refute everything tom says. checking the future at this hour indicated down 87. we'll see. it will depend on the job. we'll be right back. [ female announcer ] it's time for the annual shareholders meeting. ♪ there'll be the usual presentations on research. and development.

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welcome back. tom friedman author of "beirut to back. social programs facing a cutback but smaller increase scene. is that the way -- does that make sense? is it a cutback. >> from what they were planning from the increase. we have seen this a lot, though. my question is at this point in time do you think it will be a sincere effort to rekindle the grand bargain. or you have seen some of the comments the president made at fund-raisers in california, i

want pelosi back. i want the house pack. i want to be able to do things in the last two years i can't do now. and even from jackie that this is another effort to paint the republicans into the obstructionist corner and then maybe win back the house. >> joe, i think there's a tension inside there. probably tension inside the president himself. it is something we have talked about the last five years. it would give us the biggest impact. buy us the greatest resiliency. we need upfront on infrastructure, to deal with our huge infrastructure deficit. it needs to be paired with long-term tax reform. and dealing with the entitlement cutbacks. phased in gradually as the economy improves. >> it seems less and less likely as they ship these one on, one

off situations. >> steve and i were talking about this beforehand. in a crazy way. we had the $600 billion tax hike after the election. now we have 1.2 billion sequester. we have medicare tax hikes as well. and other spending cuts. in our own crazy, haphazard way. and we have gotten to some kind of weird bargain. i think both parties getting together would. and i wonder if the markets still haven't gotten that. >> that's a great point. you're not going to get things like tax reform. >> right. >> forget about individuals. >> combined with rates coming down. rates are not going to come down. >> the whole thing is suboptimal.

>> are you going to watch when obama care goes into full effect? >> look, i'm not an expert on this. >> right. we even had zandi, who has been -- he's going to be on today. he's wondering whether certain employment metrics do become r50, 49. >> i talked to a lot of hospital providers. they're very worried about the cutbacks. >> and in terms of the job picture. >> and what it means in terms of hospitals staying open. >> joe, just to go back to the central argument, this is what i meant when i said we need to use this time-out to really get our house in order. because this is a really unusual period. people forget -- we have gone

from a connected world to a hyperconnected world but also from interconnected world to an interdependent world. people have lost sight. if grease falls out of the eurozone, we're obligated to protect them. greece can kill us. we saw with little cyprus can do. when the world gets interdepend epbt. we are fun. those numbers are going to be flashing record. i don't really care at all. so when you get this interdependent geopolitics is completely inverted. and i don't think we have fully caught up with that. this is all by post 9/11. >> if we were to make headway

with gay marriage, guns, will that be a successful second term or do we need to get the grand bargain and unemployment down? can there success? >> i think those are very important. all the economics aside, joe, the country feels like we're children of permanently divorcing parents. and i think a grand bargain on an upfront indiafrastructure an long-term fiscal rebounds, i think the impact of that, just the kind of sense of the adults working together again would -- i think it would be very -- >> do you think the president is ready? >> i do think he is ready. there is certainly a core group meeting with the president. they clearly want to do this. not only for the country but i

think they understand for their party. they can't win another election being the party of no on all these issues. >> you talked about how we have given up this five years. we have not kind of looked around the globe and figured out how to make things more strong. if you look back to the major financial crisis of the past, the great depression, it took a world war to pull us out to get people back to work and economies moving again. that's a scary thought. >> it's a very scary thought. >> i haven't put that in perspective. we have had two wars. iraq and afghanistan. you know, i think -- one thing that has happened since world war ii is that we are much more interconnected. >> what's the whole point of the eu, right? >> exactly.

the eu at this route was a political design to prevent the kind of wars of europe. at the same time, us and china. you can talk about war, but can you imagine it? we're one country in some ways. you hope these geo economic bonds will restrain the worst behavior. but you never know. suddenly the japanese take over some island some of us can't even find on a map in the south china sea, you have no idea what can lead to what. that's why you want to be resilient. >> all right. before you go, you have to answer one question for me honest honestly, when you first heard about cyprus, were you worried -- for me it was like you're kidding. problems at cyprus? so the course is fine.

>> there's nobody in the bank there. >> so you admit that. thank you. great to see you, tom. coming up, house majority leader eric cantor on jobs, sequestration and new bills making life work. at the top of the order, the final countdown. jobs friday is here. so is our panel of market pros and experts. zandi, ghoulsby. [ penélope ] i found the best cafe in the world.

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welcome back to "squawk box", everybody. in our headlines this morning, we're just an hour away from the march jobs report. economists looking for 200,000 new normal pharm jobs. 7.7% was the same as it was last month. it's likely to be largely overshadowed. the government is out with february trade numbers. we'll be watching the numbers pretty closely. and boeing set for a certification test flight for

its grounded 787 jet.

crazy numbers there. did you see those? crazy. did you see japan? the hang seng. europe is down. we're indicated down a down as far as futures. that japan stuff is, you know, a lot happening in the far east at this point. we'll talk a little bit about all this stuff with a leader, a

leader of majority of people. eric cantor. a budget proposal includes cuts to social security. it's a sign that a budget compromise is becoming more of a possibility. i don't know. let's ask eric cantor. he is on set for us the next half hour. republican leader eric cantor. good morning. number one, we just called it a cut. i showed you this. it's less of an increase. i don't know whether it's really a cut. and number two, if jackie collins of the "new york times" in the fourth paragraph even admits that it's likely the republicans -- it's got these big revenues, taxes in it again with no lowering of marginal rates, maybe it's not a serious proposal. the midterms come up. he said this week i want pelosi back in as speaker, right? and she knits right there maybe this is more posturing to paint

you in the obstructionist quarter. >> first of all, we're not going to see pelosi back in as speaker. i think the american people want to see, you know, a check and a balance in washington. we're about to see the implementation of obama care right now. people who are making premiums now struggling. small businesses, employees, looking to see how they're going to get covered. it's going to be a real challenge, this administration. i think we have a lot of room for improvement on that. as far as the budget is concerned, i am in a wait and see mode whether this white house is very serious about coming together. >> it looks like it would be the same, implying the same day the president offered boehner last time. that's already gone through. that deal with 28% cap on

deductions for the wealthy. so the same deal maybe on the entitlement side with additional taxes on the other side. >> the funny thing is, joe, there's a lot that the two sides agree on in washington. for the life of me i can't understand why we don't see the white house come forward and embrace things. >> you don't have to agree on everything. you do everything you want the last two years. >> what are the things you agree on? >> for instance, there's an article in the journal that talks about combining parts a, b, and medicare. that is something that the simpson commission advocated. it's something that both the house and senate democrats are talking about. the white house has indicated it is okay with that. basically what it does is i think it can ultimately promote efficiency. it will limit the exposure for

catastrophic instances in health care. why introduce the need to raise tax the way they do every time. i'm in a wait and see mode. >> what about immigration? where is there agreement on that issue? it seems there is more of a middle ground? >> i think so. it's all about balancing being a country immigrants. our ancestors made a decision and to build a new life. i think you balance that that we are a country of laws. we have to make sure we uphold the laws and evenly apply them. i'm hopeful we can get something done. now, there are individual pieces that are still outstanding, worker permits. i think we should act first if

we can't do anything else, make sure the kids who are here, unbeknownst to them, know no other place than this as home, provide them citizenship. on a longer spectrum we can work something out. >> we never talk gay marriage. but why not? say you had definitive evidence that 52%, 53%, 54% of the country think it's okay now for gay people to get married. i know a lot of gay people that make great republicans. these free market guys, litany of private sector commitments. they vote the other way because of this. do the republicans, will they forever be behind the curve and will history judge they waited way too long to move were what looks like the general population? >> i don't know where the supreme court comes down. as you know they're discussing

this. >> they think maybe states should do it? >> right. >> they seem a little bit scared too to be in front of things instead of concurrent or behind things. >> but, you know, it's amazing, though. this is a country of diversity. i think there are those of us who have personal religious convictions. we as a country need to respect people about their opinion. i think that's what has been lacking in all of this debate. a lot of people, joe, would really adhere to the kinds of things that republicans stand for. the last election showed us they aren't being received in the proper way.

>> they still want to deny -- >> i don't think you see the other party totally unanimous on any issue. >> it's in their platform at this point. >> this is true. but i think we are all a very -- part of a very divorce country and appreciate the freedoms we are given here as americans. but part of the deal is we have to be tolerant of other people. >> we'll see. if we really are free, everybody should be free. >> then again, if it's a religious issue you have to raise the question what does the government have to do. >> your religious beliefs interfere with someone else's freedom. >> no one is asking you to marry another guy. you're looking at me like maybe we could -- but nobody is asking

them to marry. and that one republican who said i'm not going to marry another guy so i'm against gay marriage. >> that's how you build. that's how you grow. on the economy, there's so much we all need to grow and get more jobs. my goodness. why don't we just focus -- >> that would be great if we could. that's the only thing i care about. i get pigeon-holed as some crazy right winger. i'm not at all. all i want are -- i want the american dream to still be possible for everyone through earned success and everyone gets lifted by -- >> but i think it's hard to separate the two.

>> you're on the wrong side of all of this other stuff. >> look at what we're doing in the house. it is aimed at trying to make life work for people. there's kids who are not getting a quality education. the future is not very bright for them. we want them to create their own dreams. so we do want to be about equal opportunity. we passed the skills act. geo said, hey, we should be consolidating, getting ready of all the schrim's that exist. >> makes sense. we should do that. it helps the unemployment fill some of these unfilled positions and industries looking for skilled workers. they can make life work for

people so they can get on about creating their dreams. >> they want to help you with your dreams. it gets complicated because they understand there are two philosophies to got there. every proposal from every side is something that is some got you politics. i'm going to give you something good. i can signed like i'm selling something good back home. but i get this part of my agenda along the way. it seems there are so few things that are clean without any sort of bias from one side or the other. >> and this is the frustration. because something like workforce training programs, right, that should be pretty easy for us. >> sure. >> so the white house says we don't agree with your version, let's see what their version is and we will work together. we want to work together. >> put stuff up there. we know this suspect going to pass. we came down on the right side with the american people. >> there's plenty of plame to go

around for sure. >> just do the is stuff that you do agree on. >> here's the thing. i was looking to your second and you were talking about grand bar bans, big deals. if we could fix it all right now. washington doesn't have a really good track record at doing that, right? so let's get back in the business of trying to win together. if we can put some on the board and take care of workforce training, do medicare a and b parts, let's start making progress together. i bet people would say we're helping the people that put us here. that's what we're supposed to be doing. and we could really do great things. and we just need the white house to come forward to sit down with us. spe speaker boehner has been with us. let's go together and start to

work on these things. we can't be, as always, posturing. got to raise taxes. got to go spend more money. let's find areas where we can agree on. >> is working together comes from trust on both sides. who do you trust? >> i want to impugn anybody. >> is there one person you say i can work with this person. >> one person i have worked with has been vice president joe biden. i was put in a situation with him when the speaker asked me to participate in the biden talks. nearly seven weeks, several times a week we met. wii see each other outside the official meetings somebody i can rely on for true information. if you have sensitivities and understand how far you can go. >> eric, we have seen better jobs numbers. there's a hope that gdp could be

better in four or five years. and i wonder, this could be evidence of a lot of things. it could be evidence that the uncertainty that republicans have talked about, that obama care, regulations, maybe those weren't as tkhraoerist to job creation as we thought. thraoepb how kaopl tkaeufb the fed has been keeping rates at vero. it has a lot to do with the slow progress we have made so far. and it's not guaranteed this year that we do 3%. it's not guaranteed that unemployment comes down. we are worried about another swoon. the sequester. now if it doesn't work, if it's true all this uncertainty has been an issue and obama care is holding things back, you will get blamed because it's the quester. it's not my fault.

everybody has got a demagogue position. meanwhile, we're stuck with a lot of people that can't get work. that's not the way it's supposed to work. >> and i think the gross products still too little, uncertain. you have been talking on this show about what's going on abroad. europe is not in good shape. unfortunately, though with a lot of problems we have, we still look to many investors and many folks looking to allocate capital like the place that is the best of the worse. we have to play to win here. we can't just sit on the fact that we're america and we are always going to be the best. no. we have to go compete. which is why we are talking about creating conditions for investment making it so people say, hey, it is a good time to take a risk. that's why we are focus on day camp, ways and means committee, working hard to facilitate tax

reform. it's hard to bring rates down and compete. >> i don't know. i think about the private enterprise is -- it's not about money. it's about morality and freedom. that should be what you -- looking for -- arthur brooks. read the books. that's what you need. >> earning success. >> not saying no to all this other stuff. >> we are putting forward things every week. great to have you here. those guys know karate. thanks for coming in. >> really appreciate it. things have gotten worse. 87 points below fair value. we do have the jobs report. in europe, quite a few red arrows. "squawk" will be right back. acceler-rental.

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take a look at what's happening in the markets. it's getting worse as we get closer to the 8:30 report, economic report, jobs report. dow down 8 points. europe, some of the markets off 1.5%.

plus 200,000 in terms of job creation. a lot of questions as to whether or not we will get that, including the the adb report we use as a precursor. when we come back at the top of the hour, the final countdown. this is the biggie. we have our panel of market pros and economists will be joining us. it leaves a lot of questions what the fed will do as well.

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worry half an hour away from the march economic report. we'll break down the reaction in the markets and the implications for the economy. the third hour of "squawk box" starts right now. welcome back to "squawk

box". first in business worldwide. i'm joe concerner with becky quick. andrew is on vacation. you're looking at a live shot at the labor department clock. economists looking for 200,000 new nonformed jobs for last month. i don't know. after the adp. >> whisper numbers are 150 i think. >> why are futures down? >> it started in europe. big drops there. when we first started this morning, futures were not down this much. >> that's partly japan. did you see what happened in japan? .36. hit stops. they lost control over there or something. hang seng is down a lot. down 600. nikkei up 200. >> the losses have more than doubled since 6:00 a.m.

>> obama administration. >> i'm sorry. >> austin is here too. >> many, many years ago, you were comparing me to this fellow to my right. >> oh, he's better looking. >> i said are you kidding me? >> let's take a look at the market. they have gotten much worse through the morning. down 80 points below fair value. we have seen a swing every day. markets gone down one day and up the next. this morning we are looking weaker. overseas in asia this is what joe was just talking b. nikkei up 1.6%. hang seng down 2.7%.

george is talking to cnbc asia about the situation in japan, the boj's action and the yen. >> japan is doing is actually quite dangerous because they are doing it after 25 years of accumulating deficits and not getting the economy going. if the yen starts to fall, which is has done, then the fall may become like an avalanche. >> the yen is at 96.22. massive moves based on the boj. among some of the other stories we have been following, what's happening in europe this morning, some weakness there. germany down more than 1.5%, as is the cac in france. and we have been watching what's happening with south korea. warning tensions with north korea could have a prolonged impact on the markets.

north korea has threatened to strike u.s. military bases. a war with south korea at any point. >> they're quoting the russian foreign minister saying moscow is in close contact with united states, china, over north korean request to consider evacuating the embassy. >> britain said the north korean query about evacuating is part of the rhetoric against the united states. britain has an embassy. i guess russia, china, i guess japan. talking about the possibility of -- >> wow. >> -- evacuating the embassy. it does seem to coincide with

the worsening of the market. >> more talk about what's happening there. a lot of back and forth. we are used to all of this tough talk. this is untested. >> they moved a missile to the east coast. they might not fire until april 15th. it's not a missile that can carry a war shed anyway. >> we have been watching other corporate news. boeing may carry out a test flight of its dreamliner today, a key step. once boeing finishes the testing, the faa will decide whether to certify and return to service. shakeup at hewlett-packard. ray lane has resigned. he is staying on the board, though.

he will remain on the board but after some votes. he was elected by a narrow margin. two other board members leaving. thompson and hammergren all won election at hp's shareholders election by only narrow margins. >> consider the possibility of evacuation if tensions flair. they're going back and forth. >> a lot of embassies there. five. >> there's 24 of them. cuba has one. >> our jobs preview panel.

chief u.s. equities analyst. he brought us adb numbers. the claims number yesterday didn't help either. and chief market strategist at mkm partners. jared is former economic adviser to vice president biden. and don't adjust your set. that is another person. not just coupe dating that. that's austin ghoulsby, professor at chicago booth school of business. quite a lineup. you supposedly know,000 invest in the stock market. you need to do that at ubs. how much would dictate whether you stay long or not. >> you had a bad january,

february. i think you'll want to bail on the stock market. >> you said 1.53. i think you want to be below 1.50 so you can throw it in swrapbd skwr's face, right? >> yeah. >> you have to decide which of us is clark kent and which of us is superman. i'm getting pessimistic because i thought the economy was only slightly turning upward. i think people overreacted last month with the good news. now i think the sequester is just going to have a debilitating growth rate that's starting to kick in. that means the jobs will be back down to 150 and below.

>> i use a bunch of different -- >> that's your stuff. >> that's okay. >> he's trying to cover his bases. >> i have a bunch of models. it is closer to 175. >> mike, where are you? >> 175, 185 for private tech tore. >> are you coming down this week? >> with ism services, it was a bit soft. claims i think a little flukey here. that one i don't think is bad as what was reflected yesterday. the 12 month moving average is right around that level. for the year, 200, maybe a

little bit above that. >> are you phoerd about the sequester. >> less with the fed doing supporter policy housing reviving. the sequester is there. but the fed did qe3 and eupl. ed the evans/bernanke rule. i think we will be closer to three for the year versus two for the last three years. so we'll see how it ends up. >> do you see anything in that rule? >> there's two sides fighting over what is going to happen. one says they're not going to do that much. when the mandate was legal, the stock market didn't go down.

on the other side, if you think everybody is going to start moving guys from full time to part-time to get them under the hours cap, in a weird way that would make the unemployment rate go down, make the average workweek go down also. but it would have more people being employed. you would have two people 20 hours a week instead of one person 40 hours a week. in the data that would not look like a head wind. >> there are a lot of cross currents. those companies near that 50 employee threshold will do hard to stay under that threshold. 213 determines what they are going to pay in 2014. i do think there's an adjustment. it's going to be now and through the middle part of the year. i do think we see some impact.

>> some people are -- i saw the thing on the bottom of the screen. the last hoorah for the rally. >> if you look at the trend of economic data and the market move, the market has gotten way ahead of the fundamentals. >> you have consensus for half a percent in earnings over a year ago. it's hard to see how that is existent with 15% running the stock markets. so i think this is like throeu pull back. >> where are ow earnings. >> 108. >> 15 times earnings. >> yeah. >> zero interest rates. >> last year you had 104. so a little bit less than a 4%

earnings growth. >> certainly not expensive. >> not expensive compared to what stkph compared to historical price earnings. >> we have never had an environment to compare it to. >> sub4% earnings growth. that's a real -- >> so smart about making money. 1.8% for 10 years. why not be 3% yield to the stock market? >> i'm not sure you want to be in the stock market. you should get earnings growth. in this kind of 2% to 3% or low twos economic environment. you're talking 4% earnings growth. 8 to 10 in a low growth, low yield environment.

are we swooning? >> wdo y swooning? you mean not doing well? >> we do it twice. >> or is this falling in love swooning? >> in a bad way. we did it twice. you remember the spring swoon. people are worried about swooning again. >> it's a long way since people are like, oh, are we going back into recession. we have had on trend modest growth. now we pull back with the sequester coming in. >> jared, i'm sorry, buddy. i know what you think. that's not why i haven't been talking to you. eric cantor loves your old boss.

is it the sequester and are we swooning, jared? >> well, first of all, i've been enjoying the conversation. thanks for bringing me into it. i thought the conversation you just had about the markets was interesting and on target. the opportunity cost oing out o now. that's the bottom line. you heard someone say gdp might be 20% for 2013. that's acceleration. i'm closer to 2.5%. that's on trend. i don't see swoon. i see continued trend growth. that's not good enough. the reason we're stuck at 7.7% unemployment, way too close to 8 and have been there for a while is because gdp has been trucking along a trend or worse. if you smooth out some of the bumps and the spikes. and so i just see steady as she

goes and she's not going fast enough. >> i don't know what the answer is necessarily. i'm more confused than ever. >> questionable investments thinking that the government knows what to do with the money it borrows from china. >> let's be clear. i think at this point china holds 10% of our debt. so it's not just -- >> anything we do, though, adds to our deficit. you know we have to finance it. hopefully it's not going to be renewable energy that can't compete with natural gas. >> joe, let me say one fiscal point that i think you overlook too much. anything that's truly temporary, adding 0 to the deficit it is stuff that gets in and out of the system that doesn't hurt you on the deficit. so that's what we need.

to help the fed. to complement the low interest rate policy. i would suspect mark zandi will agree with me. >> he designed the stimulus. >> but the reality is there is no additional fiscal policy. >> that is the reality. >> this is written in stone. we will have ride it through. the sequester will add to the drag. all right. you're going to stay and respond to this. >> i'm not a huge fan. i think getting in and out -- you need a long-term plan and we don't have one. >> austin turned into a catalyst once he left the administration. our panel will stick around as we continue to count down the

march jobs report. first, kayla will bring us a report on employment in the financial sector. >> joe, really, two years later you're still doing this. still mispronouncing my name. wall street is still laying off workers in big numbers. the worse could be over there. we'll tell you why up next. [ penélope ] i found the best cafe in the world.

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jpmorgan unveiling 17 layoffs in the next two years. morgan stanley, 1600 jobs. barclays 3700 jobs. regulation caused banks to entire business lines. even though it's down, hiring is not out. according to the bureau of labor statistics the sector added 170 jobs since its low two years ago. the unemployment rate dropped to

4.5%. that is so far below the national average. expected boom. banks are bumping up lending, investment banking, bond underwriting teams. you name it. securities and investment banking jobs up 9%. that's the most of any subsector. overall, wall street will be a smaller portion of the jobs landscape. look at month-by-month growth. it's still anemic. it's grown 2%. it looks like there is a little bit more room to run. >> we will continue this conversation with you very soon. coming up, the the final

countdown. rick and steve into the conversation. i promise i won't try to get them started. after the number, reaction from whatever it is from squawk market master martin feld stein. this is america. we don't let frequent heartburn come between us and what we love. so if you're one of them people who gets heartburn and then treats day after day... block the acid with prilosec otc and don't get heartburn in the first place!

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welcome back, everybody. payroll number. 153,000. jared, 170. mark and mike both at 175. jonathan is expecting 190. and joining us right now for our bookends of predictions, rick santelli and steve liesman. >> rick and i think the same concept, if you're not living on the edge, you're taking up too much space. i'm at 210. rick is at 153. a lot of the weakness is really a late march/april idea. >> april is one of the things -- >> except adp.

and the claims numbers were way down in the week of our survey. >> yesterday's number doesn't matter. >> i used to forecast in a certain proximity. that hasn't worked for three or four years, mark. >> you threw your own the window. >> i would have said 200, like the consensus. >> what are you thinking that the market --

>> if we get a decent number, 200 or plus, the market write off some of the weakness or not? >> my guess is 151. japanese government bonds will dominate all the markets today. they traded from in the 50s down into the low 30s in terms of yield. then up to 65 basis points. then they virtually closed unchanged on the week at 53. circuit breakers kicking in for volatility. i think that is going to define some of the markets. but yeah i think 151,000 on jobs. i just want to see how many more people we stopped counting. >> 153 but you revised to 149. price is right rules are in effect. the panel will be sticking around. we have everybody's guesses up on the board. we'll see who is closest. look at the u.s. equities future. 83 below fair value for the dow. ♪

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welcome back. just seconds away from the march

employment report ahead of the numbers the futures are responding to north korea and what rick was talking about, crazy fluctuations and japanese yields. now from the labor department, the numbers. it might help the market. >> up 88,000. march nonfarm payrolls increase by just 88,000 jobs. the unemployment rate is 7.6%. no change in average hourly earnings. way below the consensus for job growth of 200,000. in march we saw private sector job growth of 95,000. significant upward revisions for january and february. revised upward.

job growth in march. construction up 18,000. job losses, retail down 24,000. down by 27,000. the u.s. postal service shed 12,000 employees. labor force participation rate in march came in 63.3%. that's the lowest since may 1979. the the total labor force declined by half a million. both employed and unemployed significant declines. 4.9 million, 39.6%. out of work six months or longer, job growth averaging 169,000 per month the last 12 months according to the labor department. back to you guys.

>> nothing is ever -- you have the revisions. >> dow futures 140. >> a visions to 86, i don't want to say austin's number but 10. >> i hear you, austin. go ahead. >> we all overshot it. this say punch to the gut. this is not a good number. now you will see a lot of discussion about the stkefter is a bigger deal than people thought it was. i think it's going to -- >> this is -- >> not the the sequester but the payroll tax hike. it's a massive decline in retail losing 24,000 jobs. that was the big thing that had been pointed out. services up okay.

80,000. construction up 18. temporary help. government only losing 7,000. so that was not huge. i think that, austin, if it's going to happen, is yet to happen. looking at the negative number the workforce declining by half a million. employed down 496,000. this is a puzzler for the the fed i think. >> this is a report -- lately when we have gotten some of these months that were less than positive you would have maybe the establishment going one way and the household survey going the other way. in this case they both seem to be going in the wrong direction. i was particularly struck by the decline. and the numbers, the actual numbers are quite volatile.

i didn't like the earnings result. it's a tough report reflecting the headwinds we have all been discussing. >> i thought it was high. >> earnings were flat but hours ticked up a bit. >> 34,600 from 34,500. >> retail trade numbers is consistent with the -- i don't think the quester is in here at all. i think health care reform might be having an impact. the employees with 499 that's the group affected by the health care reform. 43 k in january. minus 5 in march. >> right. >> i guess i would challenge mark's view on this. you might be right. i certainly understand the

logic. but i think the bigger problem, especially for small businesses is just lack of consumer demand. if you look at the wage trends, the compensation trends they are really flat. i don't think employers will make decisions based on a complicated policies with lots of cross currents versus consumer demands. >> this is a sharp slowing. i can't remember what the numbers were but 30 or 40k. now we're minus 20. >> things very sharply declining. it magically went away after three weeks. >> do you think that was -- >> you have to think sit.

>> do you think that was a policy mistake to let that expire? earlier you were saying you weren't for that. >> it's not a question of policy mistake. we're talking about what's going on right now in the numbers. but to a certain extent i think the market shrugged this off prematurely. in fact, the consumer did pull back. businesses responded by pulling back employment in march to an event that happened in february. >> it was a fair analysis but a policy mistake. >> when you have that payroll tax cut two years that is money going to support social security. we know social security has issues down the road. how long can you expect to not be funding that? >> that's a fair point. general revenues replacing every penny that went to the payroll tax cut. >> why not look at some tax reform overall instead of a one-off policy for money that is supposed to be going to social security. >> i don't think we have to cast

short-term, near-term attacks on the current slump which as we see today is deeper than we thought. while at the same time planning for the long term. >> i want to talk to austin for a second. rick, what do you make of it? >> i guess the way i look at it, we're now 0.1 lower in the unemployment rate. so the fed is 0.1 closer to 6%. sounds ridiculous in the context of this number, doesn't it? >> is the fed going to look at this and say -- >> no. >> no, they're not. >> you should look at the part-time for economic. >> austin, you know how in conversations we had three or four times, five times in the past i asked whether obama care,

regulation and uncertainty whether that is hurting the u.s. economy, does that explain the long-term below average growth. you always said, well, it doesn't make sense. europe is slowing down as well. it's happening around the globe. if we have continued subpar growth and we go back. even auptick in unemployment, will it be all quester to you? >> no. >> are you sure? >> could it be we have problems with the sequester. >> you forgot the sentence before the sentence. wow, i can't believe your number was so accurate, austin. if we see impact on numbers, the average hours worked going down as they start switching people to part-time, i would be willing to say that's probably coming. >> we really, really, really,

really need to get the unemployment rate down. if it starts upticking and we go into another swoon, we will talk not four or five years, we're going to be talking seven, eight years. a whole generation of americans is not going to be able to get a job. we've got to get the employment rate up. the participation rate up. that is so key. by the way, steve liesman, i think what might have happened to the u6 rate, a bunch of people left part-time for economic reasons. involuntary part-timers are down 350,000. >> minus 350,000, that's right. >> that might be people dropping out of the labor force because they can't find the work they

need. >> i was going to say another way to look at it, 268 in february, 88 in march. joe pointed out in the article this morning that said these are incredible volatile numbers. >> yeah. >> i would say that the risk that the economy has slowed down has increased. but i wouldn't say it's gone beyond, say, a 30% chance right now. >> beyonce? >> i wouldn't say. i don't think that is now the most likely scenario. 3.5% in the first quarter. we talked earlier how those numbers have been revised down. so maybe it's two and a half or maybe it's three. but i'm not sure if i was sitting on the edge of the windowsill i would jump on this number. >> i agree with steve. but you have to consider the the household survey also, which was more negative than many of us

expected. you're right. >> average monthly job growth is 175k. >> we get caught up in ups and downs. >> rick, do you see it? do you see it coming? if we have another bad year and if unemployment doesn't come down, it's going to be down. it's going to be sequester and that the republicans won't agree to this latest sort of faux offer from about a grand bargain. it will be the reps obstructionist fault not this activist government. it's coming. >> well, of course. becky nailed it as well. everybody is going to blame 2% payroll tax hike. it's so weird to the see democrats in favor of lowering taxes, not raising them. in the end if we can't even keep

our contributions to our future intact i can't believe we're going to stand a chance to actually make any major employment reforms. >> contribution to the future. >> yes. >> it is doing everything we can right now to lower unemployment. that's our contribution to the future. and where it ought to be, rick. and there is not ape single forecast i have read and i will pay you 10 bucks if you accepted it to me, rick, that shows cutting government spending increases jobs at this point right now. i want that forecast. >> you don't understand. you know what, i will go to russia where you spent six years. >> rick, that's a really intelligence response. way to go, rick. show him your smarts right there. i'm telling you send me a forecast. >> put the sickle on it. >> higher job growth and

government spending -- >> just talking over -- >> thanks, guys. thank you, guys. thank you, guys. we have it all the way to the end. we're almost there. guys, thank you, everybody, for all the time time and all the great analysis. this is a huge number. we're going to continue to watch it. when we come back, more of the jobs market marty feldstein. people listen when he speaks. stick around. we'll be right back. ♪ no two people have the same financial goals. pnc works with you to understand yours and help plan for your retirement. visit a branch or call now for your personal retirement review.

welcome back, everybody. we have been watching the markets reaction. march report came in 88,000 jobs created, well below the 200,000 that most had been anticipating. marty feldstein is a professor of economics at harvard university and professor, thank you very much for joining us. you look at these numbers. what's your reaction? >> well, they are just very, very bad. i mean, it's not just that the payroll gain was 88,000. very sharp decline in the labor force participation rate. so this is a very weak labor market. >> a very weak labor market. and people have been trying to figure out if we are headed into swoon. spring precursor of what's to few months?next

>> i think we will be very lucky from the fourth quarter of last year to the this year, we of will be lucky if we have 2% growth this year. than 2% last year. we had only 2% the year before. starting off 're pretty badly. now, i know there are a lot of estimates that the first quarter gdp number will be a sizable number. but that's driven by estimates at what's happening to inventori inventories. first quarter doesn't look all that good. of weakness in employment it's going to be very hard to keep up any kind of serious growth. >> i know we're very focused on the month to month and week-to-week numbers. the market is trying to anticipate these things and how they add up. when you take a slightly longer term, what does this mean? mark zappedy said as he was walking off, mark my words, this time next year we will be off to the races. >> i don't see any evidence for

anything that would make it happen. we're talking about an economy will have a fiscal hit between the sequester, increased taxes, high income taxes. we're going to see a fiscal 1.8% of gdp. only grew 1.7% of last year. hitting with negative shock as large. so i think this is going to be a tough year to get back to even 2% real gdp growth. >> it's probably not deficit worries. rates are still at zero. we haven't had to pay the piper for any of those things yet. what is it? i guess it's just demand. what is causing demand to be down? we ever see it's active and the from the fed itself?nt >> i think the fed is trying

very hard but not doing very much. boosting the stock market in order to raise consumer spending, contributed a few a percent each year the last few years but it is not enough to generate the growth we 3,%, 4% real gdp growth. picking up. it's not enough. coming from such a low base that even in the last part of last year it of growing real term 17% annual rate. its actual addition to gdp i s 0.3%.a so we're just not getting it. >> why? okay. so given the financial crisis and how difficult that was and how long it takes to recover from something like that, are we ahead of the plan and the recovery from that? no. are we behind plan then? behind e definitely plan. but i think part of it is that up this enormous deficit. a deficit. down. it has to be wound

it has to be wound down. as i said, if you take 1.8% of gdp out of the spending dream this year, it's very hard given how generally weak the economy very hard to get any strong growth. and of course the rest of the o. slow growth in asia and real gdp declines in europe, our are not going to be very either. yes, the fed is keeping long-term interest rates very low so we don't get the signal of how bad the fiscal deficit is, but anybody who thinks about say, you know, at some point they're going to raise more or cut spending some more and therefore, i have to be very careful about making commitments. >> but is the fed right, then, to continue with its qe? think the balance is no. that is to say that the gain getting is very

small if at all anymore and the s they're building up this very large bubble in which asset prices are way out of line. ten-year treasurys at 1.7% so a ten-year treasury yield. the stock market kept artificially high by virtue of that, so i think they're taking big risks once again. >> professor, thank you very much for your time. >> good being with you. >> coming up, jim cramer. this is interesting for jimbo to see if he thinks things are as positive as he thought a week ago and we'll talk about what to do with the stock market, plus his picks for the ncaa final four matchup. nia, i'm mike. what do you drive? i have a ford explorer, i love my car. and you're treating it well? yes i am. there are a lot of places you could take your explorer for service, why do you bring it back to the ford dealership? they specifically work on fords. it seems to me like the best care. and it's equal or less money, so it's a value for me.

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let's get down to the new york stock exchange. jim cramer joins us right now. this is a biggie. you said yesterday the economic numbers have been coming in weaker, but now what? >> i'm struggling here. i'm struggling to find anything good about it. i'm trying to figure out exactly how worried we were three, four weeks ago. the president was on tv pretty regularly saying look, there will be paralysis in the country. we did believe sequester could

shut down this country. maybe it's under that guise that we got this terrible number. it is a terrible number. it is kind of amazing that, frankly, it looks like it's a permanent unemployed level. i disagree with professorfeld stein because if bernanke could have been doing this, we could be in a lot of trouble. just three weeks ago we were worried about when bernanke was going to stop the bond buy. he knew more than we did. >> we heard earlier this week from some fed governors that maybe we'll stop talking about that. is this sequester relate order the payroll tax cut? there are a lot of thing goings. >> i do believe it's sequester related and i think we were expecting the world to end three or four weeks ago and it was from cyprus and now from japan. i do believe the country was frozen by the president who was trying to get scare tactics to get something done and the republicans called his bluff,

and i think america stopped. has it started again since april? >> i'm not seeing from retail sales that things are nearly as bad and i'm not seeing from the companies i've talked to that anything is bad. the number has been the single biggest make or break in the market. i'm not going to come up with anything good. not. >> this is a tough one and we are scratching our heads and this is a day people will be watching because you'll cover it once the market opens up. >> you don't like these numbers. if you go back to september 2007 it was the number that jumped and started everything. you don't want to see these numbers. these are not the right numbers. >> we will see you in a couple of minutes. thank you. >> several stocks will move this morning, but only one will be stock of the day or the stock of the day du jour. is it in your portfolio? find out next. [ penélope ] i found the best cafe in the world.

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